A year for the history books, 2020 will go down in infamy as a year of uncertainty and constantly adjusting to new normals. The negative effects of the COVID worldwide pandemic touched every aspect of our lives, including the vacation rental industry, which experienced the highest of highs and lowest of lows. As managers start the new year, it’s important to take into account all parts of their business to improve the bottom line.
The old saying goes “it takes money to make money”, which rings true for the vacation rental industry. As Matt Landau, founder of VRMB, says, “You need money in order to do everything else. If you haven’t figured out something, some kind of money solution to your business, your business or passion will be no more.”
In order to protect your bottom line, you need to have a steady cash flow. One way to do this is to increase your bookings. You can also optimize operations and reduce expenses. Finally, you can increase revenue after booking. The best way to build revenue after bookings is by selling services to your guests. Here’s why:
1). Future bookings are uncertain
We are far from the end of the COVID-19 pandemic. Even with a vaccine now being given to many, restrictions could tighten at any time and bookings could diminish drastically. If 2020 taught us anything, it was to be prepared for anything and everything. The first part of the year was overall devastating for the vacation rental industry, especially with the lost income from canceled Spring Break trips. Once states started opening back up, many rentals saw a booking surge that exceeded 2019’s numbers. Then those numbers dropped again in numerous areas as restrictions were tightened. And now we’re in the toughest stretch of the pandemic as we navigate through the holidays.
There is positive news, though. The 2021 Vrbo Trend Report found that 82 percent of families have already made travel plans for 2021. That’s great news for vacation rentals, but COVID could throw a wrench in everything the way it did in 2020. The uncertainty of what bookings will look like in the future means you need to find other ways to add to your cash flow and protect the bottom line like selling your own services.
2). Overall costs have increased
Operating a vacation rental during a pandemic has not been for the faint of heart. Increased operational requirements because of COVID guidelines have led to increased costs for things like extra cleanings and canceled bookings. Many managers are offering discounts to boost occupancy levels and battle increased competition, which increases their overall costs because they’re losing out on the full rental amounts they could be bringing in.
Online travel agencies also continue to take their (often ever-increasing) cut. One such example of this is Airbnb. Starting November 1, Airbnb changed their fee structure to a straight 15 percent fee to the hosts and no fee charged to guests. Selling your own services won’t eliminate these additional costs, but can help you balance them.
3). Upselling gives you a safety net
The uncertainty of future bookings coupled with increased costs makes having a strong cash flow even more necessary to stay out of the red. You can accomplish this by boosting revenue sources, including upselling and charging for what you might have given away before.
Happy guests lead to positive reviews and high ratings, which leads to more bookings and rebookings. What makes guests happy? A great experience! Guests are willing to pay for services they value and that will lead to a better vacation experience. The hotel industry has been upselling services for decades and travelers are accustomed to paying for added benefits.
What are guests willing to pay for?
- Curated services that take the work and stress out of planning their vacation. You do the leg work ahead of time and the guest just chooses from the experiences they want to do.
- Flexibility to check in early or check out late. No more killing time wandering the streets waiting for their rental to be available!
- Mid-stay cleaning that keeps the home beautiful without guests having to lift a finger or laundry services so guests don’t have to hassle with it.
- Equipment rental from someone they already trust…you! Your guests trust you; they wouldn’t have chosen your property if they didn’t. If you offer rentals on kayaks, bikes, etc. they’re more likely to purchase from you than an outside source because you’ve established a trusted relationship.
- Grocery delivery, airport pickup, and other transportation-based services. Many guests won’t have their own transportation and are willing to pay for someone to get them where they want to go.
- Upgraded welcome baskets. Offer guests the option to add extras to their welcome baskets such as bottles of wine, local food or produce, or souvenirs from the area.
The revenue you bring in from these upsells can go a long way to pad your bottom line and protect your cash flow.
4). People want to spend money on travel
Thanks to canceled trips and broken travel plans from 2020, 33 percent of travelers are willing to spend more on future travel than they traditionally would have, according to the Vrbo 2021 Vacation Rental Trends report.
One positive of the pandemic is the increase in savings. The U.S. Bureau of Economic Analysis found that savings hit a historic high of 33 percent in April and savings rates have remained well above average since then according to Statista. Thanks to more Americans saving more money, the pent-up demand and desire for travel mean those dream vacations are closer to reality. Capturing this demand and travelers’ willingness to pay for quality experiences can easily add to your bottom line.
By planning for upselling now, you can be ahead of the curve ready and waiting when the influx of travel starts back up. All that upselling will mean nothing but good things for your business.
5). Easy upsells mean easy money
Travelers are willing to pay for those little extras, but it’s up to you to provide them in an easy and stress-free way. If guests don’t know what you have to offer, they won’t buy it. So, it’s critically important to get your services out in front of the guest right away. Your guests don’t want to have to call you, search around or deal with negotiating rates for experiences and services.
GuestView Guide, a wall-mounted digital concierge, takes the guesswork out of buying and selling services by providing a way to buy and sell in an engaging way. With GuestView Guide, you can put descriptions of your services and pricing right in front of guests in a fun way. Having all this information at their fingertips means fewer phone calls, fewer headaches, and fewer issues. Guests see the price for each service and can decide “yes” or “no” without unnecessary interactions or negotiations. With GuestView Guide, you can also partner with local merchants and service providers, charging them to advertise on your displays.
The Bottom Line
The bottom line is that selling your own services will lead to an increase in your business’s bottom line and GuestView Guide makes upselling easy to do. GuestView Guide puts your services front and center with guests in a fun, engaging, and stress-free way. Visit our website, guestviewguide.com, to learn more.
